Jack Henry & Associates, Inc. Reports Fourth Quarter and Full Year Fiscal 2024 Results
Fourth quarter summary:
-- GAAP revenue increased 4.7% and GAAP operating income increased 1.2% for
the fiscal three months ended June 30, 2024, compared to the prior
fiscal year quarter.
-- Non-GAAP adjusted revenue increased 6.4% and non-GAAP adjusted operating
income increased 5.3% for the fiscal three months ended June 30, 2024,
compared to the prior fiscal year quarter.(1)
-- GAAP EPS was $1.38 per diluted share for the fiscal three months ended
June 30, 2024, compared to $1.34 per diluted share in the prior fiscal
year quarter.
Fiscal year summary:
-- GAAP revenue increased 6.6% and GAAP operating income increased 1.8% for
the fiscal year ended June 30, 2024, compared to the prior fiscal year.
-- Non-GAAP adjusted revenue increased 7.4% and non-GAAP adjusted operating
income increased 10.3% for the fiscal year ended June 30, 2024, compared
to the prior fiscal year.(1)
-- GAAP EPS was $5.23 per diluted share for the fiscal year ended June 30,
2024, compared to $5.02 per diluted share in the prior fiscal year.
-- Cash and cash equivalents were $38 million at June 30, 2024, and $12
million at June 30, 2023.
-- Debt outstanding related to credit facilities was $150 million at June
30, 2024, and $275 million at June 30, 2023.
Full year fiscal 2025 guidance:(2)
Current
GAAP Low High
Revenue $2,369 $2,391
Operating margin 23.0 % 23.2 %
EPS $5.78 $5.87
Non-GAAP(3)
Adjusted revenue $2,353 $2,375
Adjusted operating margin 22.7 % 22.8 %
MONETT, Mo., Aug. 20, 2024 /PRNewswire/ -- Jack Henry & Associates, Inc. (Nasdaq: JKHY), a leading financial technology provider, today announced results for the fiscal fourth quarter and full fiscal year ended June 30, 2024.
According to Greg Adelson, President and CEO, "We are very pleased to report overall strong financial performance results for the fourth quarter and full 2024 fiscal year. We produced record revenue and operating income in fiscal year 2024 along with our highest-ever sales bookings in both the fourth quarter and fiscal year.
Technology spending remains robust with significant demand for our innovative solutions. Even with record sales bookings, we continued to replenish and keep our sales pipeline near its all-time high. We are well positioned for future growth as we continue to invest in innovation, execute on our strategy, and deliver for our
clients and shareholders."
(1 )See tables below on page 4 reconciling non-GAAP financial measures to GAAP.
(2 )The full fiscal year guidance assumes no acquisitions or dispositions are made during fiscal year 2025.
(3) See tables below on page 8 reconciling fiscal year 2024 GAAP to non-GAAP guidance.
(4 )See table below on page 14 reconciling net income to non-GAAP EBITDA.
Operating Results
Revenue, operating expenses, operating income, and net income for the three months and fiscal year ended June 30, 2024, compared to the three months and fiscal year ended June 30, 2023, were as follows:
Revenue
(Unaudited, In Thousands) Three Months Ended % Year Ended %
Change Change
June 30, June 30,
2024 2023 2024 2023
Revenue
Services and Support $316,739 $311,931 1.5 % $1,275,954 $1,214,701 5.0 %
Percentage of Total Revenue 56.6 % 58.3 % 57.6 % 58.5 %
Processing 243,173 222,703 9.2 % 939,589 863,001 8.9 %
Percentage of Total Revenue 43.4 % 41.7 % 42.4 % 41.5 %
REVENUE $559,912 $534,634 4.7 % $2,215,543 $2,077,702 6.6 %
-- Services and support revenue increased for the three months ended June
30, 2024, primarily driven by growth in data processing and hosting
revenue of 11.5%. The increase in services and support revenue was
partially offset by the decrease in deconversion revenue quarter over
quarter. Processing revenue increased for the three months ended June
30, 2024, primarily driven by growth in card revenue of 8.3% and
transaction and digital revenue of 14.0%. Other drivers were increases
in payment processing and remote capture and ACH revenues.
-- Services and support revenue increased for the fiscal year ended June
30, 2024, primarily driven by growth in data processing and hosting
revenue of 10.9%. Other drivers were increases in software usage,
consulting, and hardware revenues. The increase in services and support
revenue was partially offset by the decrease in deconversion revenue
fiscal year over fiscal year. Processing revenue increased for the
fiscal year ended June 30, 2024, primarily driven by growth in card
revenue of 6.2% and transaction and digital revenue of 17.7%. Other
drivers were increases in payment processing, remote capture and ACH,
and other processing revenues.
-- For the three months ended June 30, 2024, core segment revenue increased
3.0%, payments segment revenue increased 7.7%, complementary segment
revenue increased 2.7%, and corporate and other segment revenue
increased 5.8%. For the three months ended June 30, 2024, non-GAAP
adjusted core segment revenue increased 4.4%, non-GAAP adjusted payments
segment revenue increased 8.4%, non-GAAP adjusted complementary segment
revenue increased 6.0%, and non-GAAP adjusted corporate and other
segment revenue increased 6.3% (see revenue lines of segment break-out
tables on pages 5 and 6 below).
-- For the fiscal year ended June 30, 2024, core segment revenue increased
6.4%, payments segment revenue increased 6.6%, complementary segment
revenue increased 5.9%, and corporate and other segment revenue
increased 14.3%. For the fiscal year ended June 30, 2024, non-GAAP
adjusted core segment revenue increased 7.1%, non-GAAP adjusted payments
segment revenue increased 6.7%, non-GAAP adjusted complementary segment
revenue increased 7.7%, and non-GAAP adjusted corporate and other
segment revenue increased 14.4% (see revenue lines of segment break-out
tables on pages 6 and 7 below).
Operating Expenses and Operating Income
(Unaudited, In Thousands) Three Months Ended % Year Ended %
Change Change
June 30, June 30,
2024 2023 2024 2023
Cost of Revenue $327,272 $308,868 6.0 % $1,299,477 $1,219,062 6.6 %
Percentage of Total Revenue5 58.5 % 57.8 % 58.7 % 58.7 %
Research and Development 39,892 38,498 3.6 % 148,256 142,678 3.9 %
Percentage of Total Revenue5 7.1 % 7.2 % 6.7 % 6.9 %
Selling, General, and Administrative 67,122 63,069 6.4 % 278,419 235,274 18.3 %
Percentage of Total Revenue5 12.0 % 11.8 % 12.6 % 11.3 %
OPERATING EXPENSES 434,286 410,435 5.8 % 1,726,152 1,597,014 8.1 %
OPERATING INCOME $125,626 $124,199 1.2 % $489,391 $480,688 1.8 %
Operating Margin5 22.4 % 23.2 % 22.1 % 23.1 %
-- Cost of revenue increased for the three months ended June 30, 2024,
primarily due to higher direct costs generally consistent with increases
in the related revenue, higher personnel costs, and increased internal
licenses and fees. Cost of revenue increased for the fiscal year ended
June 30, 2024, primarily due to increased personnel costs, higher direct
costs generally consistent with increases in the related revenue, and
increased internal licenses and fees.
-- Research and development expense increased for the three months ended
June 30, 2024, primarily due to higher consulting and other professional
services (net of capitalization) and increased cloud consumption costs
(net of capitalization). Research and development expense increased for
the fiscal year ended June 30, 2024, primarily due to higher cloud
consumption (net of capitalization) and increased personnel costs (net
of capitalization) related to the Jack Henry Platform and Payrailz, LLC
("Payrailz").(6)
-- Selling, general, and administrative expense increased for the three
months ended June 30, 2024, primarily due to higher personnel costs,
including increased commissions, payroll taxes, and medical benefits
expenses. Selling, general, and administrative expense increased for the
fiscal year ended June 30, 2024, primarily due to higher personnel
costs, including the voluntary employee departure incentive payment
(VEDIP) program(7) and commissions expenses.
Net Income
(Unaudited, In Thousands, Three Months Ended % Year Ended %
Change Change
Except Per Share Data)
June 30,
June 30,
2024 2023 2024 2023
Income Before Income Taxes $130,384 $123,950 5.2 % $498,019 $474,574 4.9 %
Provision for Income Taxes 29,311 26,177 12.0 % 116,203 107,928 7.7 %
NET INCOME $101,073 $97,773 3.4 % $381,816 $366,646 4.1 %
Diluted earnings per share $1.38 $1.34 3.3 % $5.23 $5.02 4.2 %
-- Effective tax rates for the three months ended June 30, 2024, and 2023,
were 22.5% and 21.1%, respectively. Effective tax rates for the fiscal
year ended June 30, 2024, and 2023, were 23.3% and 22.7%, respectively.
According to Mimi Carsley, CFO and Treasurer, "For both the fourth quarter and the fiscal year, our private cloud and processing services continued to drive robust revenue growth. These key areas of revenue had strong, organic revenue growth of 9%, while overall revenue grew over 7% on a non-GAAP basis and non-GAAP operating
income grew over 10%."
(5) Operating margin is calculated by dividing operating income by revenue. Operating margin plus operating expense components as a percentage of total revenue may not equal 100% due to rounding.
(6 )On August 31, 2022, the Company acquired all the equity interest in Payrailz.
(7) The VEDIP program was a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
Impact of Non-GAAP Adjustments
The tables below show our revenue, operating income, and net income for the three months ended June 30, 2024, and fiscal year ended June 30, 2024, compared to the three months ended June 30, 2023, and fiscal year ended June 30, 2023, excluding the impacts of deconversions, the VEDIP program expense,* the (gain)/loss on sale of assets, net, and the acquisition.
On August 31, 2022, the Company acquired all the equity interest in Payrailz (the "acquisition"). Payrailz related revenue, operating expenses, operating income, and net income excluded in the tables below in the column for the year ended June 30, 2024, include Payrailz activity for the first two months of the fiscal year only.
(Unaudited, In Thousands) Three Months Ended June 30, % Year Ended June 30, %
Change Change
2024 2023 2024 2023
GAAP Revenue** $559,912 $534,634 4.7 % $2,215,543 $2,077,702 6.6 %
Adjustments:
Deconversion revenue (6,693) (14,733) (16,554) (31,775)
Revenue from acquisition (1,945)
NON-GAAP ADJUSTED REVENUE** $553,219 $519,901 6.4 % $2,197,044 $2,045,927 7.4 %
GAAP Operating Income $125,626 $124,199 1.2 % $489,391 $480,688 1.8 %
Adjustments:
Operating income from deconversions (5,594) (13,054) (13,146) (27,513)
VEDIP program expense* 16,443
Operating loss from acquisition 2,237
(Gain)/loss on sale of assets, net 2,816 (4,567)
NON-GAAP ADJUSTED OPERATING INCOME $120,032 $113,961 5.3 % $494,925 $448,608 10.3 %
Non-GAAP Adjusted Operating Margin*** 21.7 % 21.9 % 22.5 % 21.9 %
GAAP Net Income $101,073 $97,773 3.4 % $381,816 $366,646 4.1 %
*The VEDIP program expense for the fiscal year ended June 30, 2024, was related to a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
**GAAP revenue is comprised of services and support and processing revenues (see page 2). Reducing services and support revenue by deconversion revenue for the three months ended June 30, 2024, and 2023 which was $6,693 for the current fiscal year quarter and $14,733 for the prior fiscal year quarter, results in non-GAAP adjusted
services and support revenue growth of 4.3% quarter over quarter. There were no non-GAAP adjustments to processing revenue for the three months ended June 30, 2024, or 2023 .
Reducing services and support revenue by deconversion revenue for the year ended June 30, 2024, and 2023, which was $16,554 for the current fiscal year and $31,775 for the prior fiscal year, and by $2 of revenue from the acquisition in the current fiscal year, results in non-GAAP adjusted services and support revenue growth of
6.5% year over year. Reducing processing revenue by revenue from the acquisition for the year ended June 30, 2024, which was $1,943, results in non-GAAP adjusted processing revenue growth of 8.6% year over year.
***Non-GAAP adjusted operating margin is calculated by dividing non-GAAP adjusted operating income by non-GAAP adjusted revenue.
(Unaudited, In Thousands) Three Months Ended June 30, % Year Ended June 30, %
Change Change
2024 2023 2024 2023
GAAP Net Income $101,073 $97,773 3.4 % $381,816 $366,646 4.1 %
Adjustments:
Net income from deconversions (5,594) (13,054) (13,146) (27,513)
VEDIP program expense* 16,443
Net loss from acquisition 4,656
(Gain)/loss on sale of assets, net 2,816 (4,567)
Tax impact of adjustments** 1,343 2,456 (1,909) 7,699
NON-GAAP ADJUSTED NET INCOME $96,822 $89,991 7.6 % $387,860 $342,265 13.3 %
*The VEDIP program expense for the fiscal year ended June 30, 2024, was related to a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
**The tax impact of adjustments is calculated using a tax rate of 24% for the three months ended June 30, 2024, and 2023, and for the fiscal year ended June 30, 2024, and 2023. The tax rate for non-GAAP adjustment items takes a broad look at our recurring tax adjustments and applies them to non-GAAP revenue that does not have its
own specific tax impacts.
The tables below show the segment break-out of revenue and cost of revenue for each period presented, as adjusted for the items above, and include a reconciliation to non-GAAP adjusted operating income presented above.
Three Months Ended June 30, 2024
(Unaudited, In Thousands) Core Payments Complementary Corporate Total
and Other
GAAP REVENUE $172,040 $212,593 $155,149 $20,130 $559,912
Non-GAAP adjustments* (2,407) (2,367) (1,777) (142) (6,693)
NON-GAAP ADJUSTED REVENUE 169,633 210,226 153,372 19,988 553,219
GAAP COST OF REVENUE 69,900 111,787 64,295 81,290 327,272
Non-GAAP adjustments* (415) (66) (188) (669)
NON-GAAP ADJUSTED COST OF REVENUE 69,485 111,721 64,107 81,290 326,603
GAAP SEGMENT INCOME $102,140 $100,806 $90,854 $(61,160)
Segment Income Margin** 59.4 % 47.4 % 58.6 % (303.8) %
NON-GAAP ADJUSTED SEGMENT INCOME $100,148 $98,505 $89,265 $(61,302)
Non-GAAP Adjusted Segment Income Margin** 59.0 % 46.9 % 58.2 % (306.7) %
Research and Development 39,892
Selling, General, and Administrative 67,122
Non-GAAP adjustments unassigned to a segment*** (430)
NON-GAAP TOTAL ADJUSTED OPERATING EXPENSES 433,187
NON-GAAP ADJUSTED OPERATING INCOME $120,032
*Revenue non-GAAP adjustments for all segments were deconversion revenue. Cost of revenue non-GAAP adjustments for all segments were deconversion costs.
**Segment income margin is calculated by dividing segment income by revenue. Non-GAAP adjusted segment income margin is calculated by dividing non-GAAP adjusted segment income by non-GAAP adjusted revenue.
***Non-GAAP adjustments unassigned to a segment were selling, general, and administrative deconversion costs.
Three Months Ended June 30, 2023
(Unaudited, In Thousands) Core Payments Complementary Corporate Total
and Other
GAAP REVENUE $167,085 $197,466 $151,059 $19,024 $534,634
Non-GAAP adjustments* (4,676) (3,510) (6,330) (217) (14,733)
NON-GAAP ADJUSTED REVENUE 162,409 193,956 144,729 18,807 519,901
GAAP COST OF REVENUE 69,554 106,699 59,673 72,942 308,868
Non-GAAP adjustments* (256) (82) (269) (3) (610)
NON-GAAP ADJUSTED COST OF REVENUE 69,298 106,617 59,404 72,939 308,258
GAAP SEGMENT INCOME $97,531 $90,767 $91,386 $(53,918)
Segment Income Margin 58.4 % 46.0 % 60.5 % (283.4) %
NON-GAAP ADJUSTED SEGMENT INCOME $93,111 $87,339 $85,325 $(54,132)
Non-GAAP Adjusted Segment Income Margin 57.3 % 45.0 % 59.0 % (287.8) %
Research and Development 38,498
Selling, General, and Administrative 63,069
Non-GAAP adjustments unassigned to a segment** (3,885)
NON-GAAP TOTAL ADJUSTED OPERATING EXPENSES 405,940
NON-GAAP ADJUSTED OPERATING INCOME $113,961
*Revenue non-GAAP adjustments for all segments were deconversion revenues. Cost of revenue non-GAAP adjustments for all segments were deconversion costs.
**Non-GAAP adjustments unassigned to a segment were selling, general, and administrative deconversion costs of $(1,068) and loss on sale of assets, net, of $(2,817).
Year Ended June 30, 2024
(Unaudited, In Thousands) Core Payments Complementary Corporate Total
and Other
GAAP REVENUE $690,738 $817,708 $618,211 $88,886 $2,215,543
Non-GAAP adjustments* (7,292) (7,781) (3,217) (209) (18,499)
NON-GAAP ADJUSTED REVENUE 683,446 809,927 614,994 88,677 2,197,044
GAAP COST OF REVENUE 287,349 442,084 256,007 314,037 1,299,477
Non-GAAP adjustments* (1,065) (3,573) (903) (24) (5,565)
NON-GAAP ADJUSTED COST OF REVENUE 286,284 438,511 255,104 314,013 1,293,912
GAAP SEGMENT INCOME $403,389 $375,624 $362,204 $(225,151)
Segment Income Margin 58.4 % 45.9 % 58.6 % (253.3) %
NON-GAAP ADJUSTED SEGMENT INCOME $397,162 $371,416 $359,890 $(225,336)
Non-GAAP Adjusted Segment Income Margin 58.1 % 45.9 % 58.5 % (254.1) %
Research and Development 148,256
Selling, General, and Administrative 278,419
Non-GAAP adjustments unassigned to a segment** (18,468)
NON-GAAP TOTAL ADJUSTED OPERATING EXPENSES 1,702,119
NON-GAAP ADJUSTED OPERATING INCOME $494,925
*Revenue non-GAAP adjustments for the Core, Complementary, and Corporate and Other segments were deconversion revenue. Revenue non-GAAP adjustments for the Payments segment were deconversion revenue of $(5,836) and acquisition revenue of $(1,945). Cost of revenue non-GAAP adjustments for the Core and Complementary segments were
deconversion costs. Cost of revenue non-GAAP adjustments for the Payments and Corporate and Other segments were deconversion costs of $(259) and $(4), respectively, and acquisition costs of $(3,314) and $(20), respectively.
**Non-GAAP adjustments unassigned to a segment were selling, general, and administrative VEDIP expenses, deconversion costs, and acquisition costs of $(16,443), $(1,177), and $(192), respectively, and research and development acquisition costs of $(656).
Year Ended June 30, 2023
(Unaudited, In Thousands) Core Payments Complementary Corporate Total
and Other
GAAP REVENUE $649,045 $767,309 $583,586 $77,762 $2,077,702
Non-GAAP adjustments* (10,924) (7,924) (12,649) (278) (31,775)
NON-GAAP ADJUSTED REVENUE 638,121 759,385 570,937 77,484 2,045,927
GAAP COST OF REVENUE 276,818 420,880 237,758 283,606 1,219,062
Non-GAAP adjustments* (913) (303) (807) (23) (2,046)
NON-GAAP ADJUSTED COST OF REVENUE 275,905 420,577 236,951 283,583 1,217,016
GAAP SEGMENT INCOME $372,227 $346,429 $345,828 $(205,844)
Segment Income Margin 57.3 % 45.1 % 59.3 % (264.7) %
NON-GAAP ADJUSTED SEGMENT INCOME $362,216 $338,808 $333,986 $(206,099)
Non-GAAP Adjusted Segment Income Margin 56.8 % 44.6 % 58.5 % (266.0) %
Research and Development 142,678
Selling, General, and Administrative 235,274
Non-GAAP adjustments unassigned to a segment** 2,351
NON-GAAP TOTAL ADJUSTED OPERATING EXPENSES 1,597,319
NON-GAAP ADJUSTED OPERATING INCOME $448,608
*Revenue non-GAAP adjustments for all segments were deconversion revenue. Cost of revenue non-GAAP adjustments for all segments were deconversion costs.
**Non-GAAP adjustments unassigned to a segment were the selling, general, and administrative gain on sale of assets, net, and deconversion costs of $4,567 and $(2,216), respectively.
The table below shows our GAAP to non-GAAP guidance for the fiscal year ending June 30, 2025. Fiscal year 2025 non-GAAP guidance excludes the impacts of deconversion revenue and related operating expenses and assumes no acquisitions or dispositions are made during the fiscal year.
For comparison and reconciliation, the table below also shows fiscal 2024 reported results, fiscal 2024 results adjusted for fiscal 2025 comparison, and fiscal 2024 acquisition activity. Fiscal 2024 non-GAAP guidance excluded the impacts of deconversion revenue and related operating expenses, acquisition revenue and costs related to the August 31, 2022, Payrailz acquisition, and costs related to the July 2023 VEDIP program.
GAAP to Non-GAAP GUIDANCE (In Millions, Annual FY25 Adjusted for Reported Acquisition
except per share data) FY25 Activity**
Comparison
Low High FY24 FY24 FY24
GAAP REVENUE $2,369 $2,391 $2,216 $2,216
$ -
Growth 6.9 % 7.9 %
Deconversions* $16 $16 $17 $17
$ -
Acquisition** $2 $(2)
NON-GAAP ADJUSTED REVENUE*** $2,353 $2,375 $2,199 $2,197 $2
Non-GAAP Adjusted Growth 7.0 % 8.0 %
GAAP OPERATING EXPENSES $1,823 $1,836 $1,726 $1,726
$ -
Growth 5.6 % 6.4 %
Deconversion costs* $3 $3 $3 $3
$ -
Acquisition costs**
$ - $4 $(4)
VEDIP Program**** $16 $16
$ -
NON-GAAP ADJUSTED OPERATING EXPENSES*** $1,820 $1,833 $1,706 $1,702 $4
Non-GAAP Adjusted Growth 6.7 % 7.4 %
GAAP OPERATING INCOME $546 $555 $489 $489
$ -
Growth 11.6 % 13.3 %
GAAP OPERATING MARGIN 23.0 % 23.2 % 22.1 % 22.1 %
NON-GAAP ADJUSTED OPERATING INCOME*** $533 $542 $493 $495 $(2)
Non-GAAP Adjusted Growth 8.2 % 9.9 %
NON-GAAP ADJUSTED OPERATING MARGIN 22.7 % 22.8 % 22.4 % 22.5 %
GAAP EPS***** $5.78 $5.87 $5.23 $5.23
$ -
Growth 10.6 % 12.3 %
Non-GAAP EPS***** $5.65 $5.74 $5.26 $5.31 $(0.05)
Growth 7.3 % 9.0 %
*Deconversion revenue and related operating expenses are based on estimates for the year ended June 30, 2025, based on the lowest actual recent historical results. See the Company's Form 8-K filed with the Securities and Exchange Commission on August 12, 2024.
**Excluded acquisition revenue and costs are for the first two months of fiscal year ended June 30, 2024 only (see "Impact of Non-GAAP Adjustments" on page 4).
***GAAP to Non-GAAP revenue, operating expenses, and operating income may not foot due to rounding.
****This cost relates to the group of employees who participated in a Company VEDIP program offered in July 2023 to certain employees of a specified minimum age who had reached a specified minimum number of years of service with the Company.
*****The GAAP to Non-GAAP EPS reconciliation table is below on page 15.
Balance Sheet and Cash Flow Review
-- Cash and cash equivalents were $38 million at June 30, 2024, and $12
million at June 30, 2023.
-- Trade receivables were $333 million at June 30, 2024, compared to $361
million at June 30, 2023.
-- The Company had $150 million of borrowings at June 30, 2024 compared to
$275 million of borrowings at June 30, 2023.
-- Deferred revenue decreased to $389 million at June 30, 2024, compared to
$400 million at June 30, 2023.
-- Stockholders' equity increased to $1,842 million at June 30, 2024,
compared to $1,609 million at June 30, 2023.
*See table below for Net Cash Provided by Operating Activities and on page 14 for Return on Average Shareholders' Equity. Tables reconciling the non-GAAP measures Free Cash Flow and Return on Invested Capital (ROIC) to GAAP measures are also on page 14. See the Use of Non-GAAP Financial Information section below for the
definitions of Free Cash Flow and ROIC.
The following table summarizes net cash from operating activities:
(Unaudited, In Thousands) Year Ended June 30,
2024 2023
Net income $381,816 $366,646
Depreciation 46,342 48,720
Amortization 153,562 142,006
Change in deferred income taxes (909) (48,199)
Other non-cash expenses 32,714 24,094
Change in receivables 28,219 (12,067)
Change in deferred revenue (10,797) (10,547)
Change in other assets and liabilities* (62,906) (129,094)
NET CASH FROM OPERATING ACTIVITIES $568,041 $381,559
*For the year ended June 30, 2024, includes the change in prepaid expenses, prepaid cost of product and other of $(115,558) and change in accrued expenses of $37,292. For the year ended June 30, 2023, includes the change in prepaid expenses, prepaid cost of product and other of $(112,316).
The following table summarizes net cash from investing activities:
(Unaudited, In Thousands) Year Ended June 30,
2024 2023
Payment for acquisitions, net of cash acquired*
$ - $(229,628)
Capital expenditures (58,118) (39,179)
Proceeds from dispositions 904 27,939
Purchased software (7,130) (1,685)
Computer software developed (167,175) (166,120)
Purchase of investments (8,646) (1,000)
NET CASH FROM INVESTING ACTIVITIES $(240,165) $(409,673)
*During first quarter fiscal 2023, the Company completed its acquisition of Payrailz.
The following table summarizes net cash from financing activities:
(Unaudited, In Thousands) Year Ended June 30,
2024 2023
Borrowings on credit facilities* $475,000 $810,000
Repayments on credit facilities and financing leases (600,000) (650,060)
Purchase of treasury stock (28,055) (25,000)
Dividends paid (155,877) (147,237)
Net cash from issuance of stock and tax related to stock-based compensation 7,097 3,867
NET CASH FROM FINANCING ACTIVITIES $(301,835) $(8,430)
*The Company's acquisition of Payrailz during first quarter fiscal 2023 was primarily funded by new borrowings under the Company's credit facilities.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, we have provided certain non-GAAP financial measures, including adjusted revenue, adjusted operating income, adjusted segment income, adjusted cost of revenue, adjusted operating expenses, adjusted operating margin, adjusted segment income margin, non-GAAP earnings before interest, taxes, depreciation, and amortization (non-GAAP EBITDA), free cash flow, return on invested capital (ROIC), non-GAAP adjusted net income, and non-GAAP earnings per share (EPS).
We believe non-GAAP financial measures help investors better understand the underlying fundamentals and true operations of our business. Adjusted revenue, adjusted operating income, adjusted operating margin, adjusted segment income, adjusted segment income margin, adjusted cost of revenue, adjusted operating expenses, adjusted net income, and non-GAAP EPS eliminate one-time deconversion revenue and associated costs, the effects of acquisitions and divestitures, the VEDIP program expense, and the gain on sale of assets, net, all of which management believes are not indicative of the Company's operating performance. Such adjustments give investors further insight into our performance. Non-GAAP EBITDA is defined as net income attributable to the Company before the effect of interest expense, taxes, depreciation, and amortization, adjusted for net income before the effect of interest expense, taxes, depreciation, and amortization attributable to eliminated one-time deconversions, acquisitions and divestitures, the VEDIP program expense, and the gain on sale of assets, net. Free cash flow is defined as net cash from operating activities, less capitalized expenditures, internal use software, and capitalized software, plus proceeds from the sale of assets. ROIC is defined as net income divided by average invested capital, which is the average of beginning and ending long-term debt and stockholders' equity for a given period. Management believes that non-GAAP EBITDA is an important measure of the Company's overall operating performance and excludes certain costs and other transactions that management deems one time or non-operational in nature; free cash flow is useful to measure the funds generated in a given period that are available for debt service requirements and strategic capital decisions; and ROIC is a measure of the Company's allocation efficiency and effectiveness of its invested capital. For these reasons, management also uses these non-GAAP financial measures in its assessment and management of the Company's performance.
Non-GAAP financial measures used by the Company may not be comparable to similarly titled non-GAAP measures used by other companies. Non-GAAP financial measures have no standardized meaning prescribed by GAAP and therefore, are unlikely to be comparable with calculations of similar measures for other companies.
Any non-GAAP financial measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. Reconciliations of the non-GAAP financial measures to related GAAP measures are included.
About Jack Henry & Associates, Inc.(®)
Jack Henry(TM) (Nasdaq: JKHY) is a well-rounded financial technology company that strengthens connections between financial institutions and the people and businesses they serve. We are an S&P 500 company that prioritizes openness, collaboration, and user centricity -- offering banks and credit unions a vibrant ecosystem of internally developed modern capabilities as well as the ability to integrate with leading fintechs. For more than 48 years, Jack Henry has provided technology solutions to enable clients to innovate faster, strategically differentiate, and successfully compete while serving the evolving needs of their accountholders. We empower approximately 7,500 clients with people-inspired innovation, personal service, and insight-driven solutions that help reduce the barriers to financial health. Additional information is available at www.jackhenry.com.
Statements made in this news release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, those discussed in the Company's Securities and Exchange Commission filings, including the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading Risk Factors. Any forward-looking statement made in this news release speaks only as of the date of the news release, and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether because of new information, future events or otherwise.
Quarterly Conference Call
The Company will hold a conference call on August 21, 2024, at 7:45 a.m. Central Time, and investors are invited to listen at www.jackhenry.com. A webcast replay will be available approximately one hour after the event at ir.jackhenry.com/corporate-events-and-presentations and will remain available for one year.
Condensed Consolidated Statements of Income (Unaudited)
(In Thousands, except per share data) Three Months Ended June 30, % Year Ended June 30, %
Change Change
2024 2023 2024 2023
REVENUE $559,912 $534,634 4.7 % $2,215,543 $2,077,702 6.6 %
Cost of Revenue 327,272 308,868 6.0 % 1,299,477 1,219,062 6.6 %
Research and Development 39,892 38,498 3.6 % 148,256 142,678 3.9 %
Selling, General, and Administrative 67,122 63,069 6.4 % 278,419 235,274 18.3 %
EXPENSES 434,286 410,435 5.8 % 1,726,152 1,597,014 8.1 %
OPERATING INCOME 125,626 124,199 1.2 % 489,391 480,688 1.8 %
Interest income 8,647 5,176 67.1 % 25,012 8,959 179.2 %
Interest expense (3,889) (5,425) (28.3) % (16,384) (15,073) 8.7 %
Interest Income (Expense), net 4,758 (249) (2,010.8) % 8,628 (6,114) (241.1) %
INCOME BEFORE INCOME TAXES 130,384 123,950 5.2 % 498,019 474,574 4.9 %
Provision for Income Taxes 29,311 26,177 12.0 % 116,203 107,928 7.7 %
NET INCOME $101,073 $97,773 3.4 % $381,816 $366,646 4.1 %
Diluted net income per share $1.38 $1.34 $5.23 $5.02
Diluted weighted average shares outstanding 73,069 73,027 73,025 73,096
Consolidated Balance Sheet Highlights (Unaudited)
(In Thousands)
June 30, %
Change
2024 2023
Cash and cash equivalents $38,284 $12,243 212.7 %
Receivables 333,033 361,252 (7.8) %
Total assets 2,924,481 2,773,826 5.4 %
Accounts payable and accrued expenses $226,084 $191,785 17.9 %
Current and long-term debt 150,000 275,000 (45.5) %
Deferred revenue 388,932 399,729 (2.7) %
Stockholders' equity 1,842,364 1,608,510 14.5 %
Calculation of Non-GAAP Earnings Before Income Taxes, Depreciation and Amortization (Non-GAAP EBITDA)
Three Months Ended June 30, % Year Ended June 30, %
Change Change
(in thousands) 2024 2023 2024 2023
Net income $101,073 $97,773 $381,816 $366,646
Net interest (4,758) 249 (8,628) 6,114
Taxes 29,310 26,177 116,203 107,928
Depreciation and amortization 50,690 48,377 199,904 190,726
Less: Net income before interest expense, taxes, depreciation (5,594) (10,238) 3,412 (32,081)
and amortization attributable to eliminated one-time adjustments*
NON-GAAP EBITDA $170,721 $162,338 5.2 % $692,707 $639,333 8.3 %
*The fiscal fourth quarter 2024 adjustments for net income before interest expense, taxes, depreciation and amortization were for deconversions. The fiscal year 2024 adjustments
were for deconversions, the VEDIP program expense, and the acquisition, and were $(13,146), $16,443, and $115, respectively. The fiscal fourth quarter 2023 adjustments for net
income before interest expense, taxes, depreciation and amortization were for deconversions of $(13,054) and gain on sale of assets, net, of $2,816. The fiscal year 2023 adjustments
were for deconversions and a gain on sale of assets, net, and were $(27,514) and $(4,567), respectively.
Calculation of Free Cash Flow (Non-GAAP) Year Ended June 30,
(in thousands) 2024 2023
Net cash from operating activities $568,041 $381,559
Capitalized expenditures (58,118) (39,179)
Internal use software (7,130) (1,685)
Proceeds from sale of assets 904 27,939
Capitalized software (167,175) (166,120)
FREE CASH FLOW $336,522 $202,514
Calculation of the Return on Average Shareholders' Equity
June 30,
(in thousands) 2024 2023
Net income (trailing four quarters) $381,816 $366,646
Average stockholder's equity (period beginning and ending balances) 1,725,437 1,495,066
RETURN ON AVERAGE SHAREHOLDERS' EQUITY 22.1 % 24.5 %
Calculation of Return on Invested Capital (ROIC) (Non-GAAP)
June 30,
(in thousands) 2024 2023
Net income (trailing four quarters) $381,816 $366,646
Average stockholder's equity (period beginning and ending balances) 1,725,437 1,495,066
Average current maturities of long-term debt (period beginning 45,000 34
and ending balances)
Average long-term debt (period beginning and ending balances) 167,500 195,000
Average invested capital $1,937,937 $1,690,100
ROIC 19.7 % 21.7 %
GAAP to Non-GAAP EPS Reconciliation Table
Actual Non-GAAP EPS Pretax Net of FY24 Pretax Net of
Tax Tax FY24 Adjusted
Reported for FY25
comparison
GAAP EPS $5.23 $5.23
Excluded Activity, net of Tax:
Deconversion $0.18 $0.14 $0.18 $0.14
VEDIP* $(0.23) $(0.17) $(0.23) $(0.17)
Acquisition** $(0.06) $(0.05) n/a n/a
Non-GAAP EPS $5.31 $5.26
FY25 Guidance
GAAP EPS
$5.78-$5.87
Excluded Activity, net of Tax:
Deconversion*** $0.13
Non-GAAP EPS
$5.65-$5.74
*This cost relates to the group of employees who participated in a Company VEDIP program offered in July 2023 to certain employees of a specified minimum age who had reached a specified minimum number of years of service with the Company.
**Excluded acquisition revenue and costs are for the first two months of fiscal year ended June 30, 2024 only (see "Impact of Non-GAAP Adjustments" on page 4).
***We are not aware of any other discreet adjustments at this time. Deconversion revenue and related operating expenses are based on estimates for the year ended June 30, 2025, based on the lowest actual recent historical results. See the Company's Form 8-K filed with the Securities and Exchange Commission on August 12, 2024.
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SOURCE Jack Henry & Associates, Inc.
